Sterling had dipped to under 1.08 euros last August but has made steady gains since and last Thursday peaked at 1.15 - the highest in seven months.

It was the strongest the pound has been since hitting 1.16 on June 8 last year.

The pound was labelled the best performing currency of 2017 and it had a flying start to 2018 and looks set to surge to higher levels.

Analysts said Sterling has been sold off early this week as some traders could not resist cashing in on recent strong gains.

Sterling is up 2 per cent since the beginning of the year.

There is continuing uncertainty over the economy despite stronger than expected GDP growth figures announced last Friday.

But hopes that the UK will soon agree a transition deal with Brussels have contributed to the currency’s strong performance.

How to get the best holiday money rate

WE spoke with Hannah Maundrell, editor-in-chief at money.co.uk to find out how you can guarantee the best rate when you go on holiday

Don’t buy cash at the airport – you’ll always be able to beat the rate with a bit of forward planning

Compare travel money companies online –Factor in delivery costs and choose the option that gives you the most cash to spend on holiday. If you’ve left it until the last minute order online for airport collection so you get the best of both worlds.

Don’t pay for travel money with a credit card – it’s likely you’ll be charged a cash withdrawal fee which adds to the cost.

Top up a prepaid card to lock in your rate now – Choose your card and read the T&Cs carefully as some apply hefty fees. WeSwap, FairFX and Caxton FX are all worth checking out.

Always choose to pay in the local currency rather than sterling – This will help you avoid sneaky exchange fees

Michael Hewson, chief analyst at CMC Markets, said the only event that could send sterling sharply lower was if talks with the EU broke down completely, which he said did not look likely as Brussels looked more amenable to negotiating with Britain.

Towards the end of last year, sterling enjoyed a slight surge as the first phase of the Brexit talks were concluded.

With the value of currency so closely linked to the outcome of the UK’s departure talks, all eyes will remain firmly fixed on the remaining Brussels negotiations – with the toughest part, the trade talks, still to come.

Both the UK and the EU’s remaining 27 member states will face “substantial losses” without a deal on Brexit, according to a recent report.

Europe would be clobbered by 1.2million job losses if no agreement were reached, while Britain would take a 4.5 per cent hit to GDP, according to the Centre for Economic Policy Research.